UPDATE 1-Citi loses bid to stop L.A. mortgage discrimination suit

June 9 (Reuters) - A lawsuit by the City of Los Angeles
accusing Citigroup Inc of mortgage discrimination can go
forward, a federal judge ruled on Monday, turning down the
bank's motion to dismiss the case stemming from last decade's
real estate boom.

The lawsuit, filed in December, accuses Citigroup of
engaging in a "continuous pattern" of discrimination since at
least 2004 by targeting minorities for high-cost mortgage loans,
violating the U.S. Fair Housing Act. The city is seeking damages
from the bank for the costs of extra services and lost tax
revenue in blighted neighborhoods.

Citigroup is one of four banks that Los Angeles has sued
since December for allegedly giving minorities home loans they
could not afford, resulting in a wave of foreclosures and a
lower tax base.

Lawyers for Citigroup had challenged the city's right to
sue, saying it had not offered specific or concrete details of
harm.

U.S. District Judge Otis Wright said a loss of tax revenue
and increased spending on services in blighted neighborhoods was
a sufficient injury to allow the city to sue.

A Citigroup spokesman said the bank remained confident it
would ultimately prevail in the case.

"This is not a ruling on the facts in the case, and we
continue to believe the suit is without merit," spokesman Mark
Rodgers said.

"Citi is proud of its deep commitment to make sure our
lending standards are fair to all of our customers," he said.

Filed in Los Angeles federal court, the lawsuit said Citi
issued high-cost loans to minorities, then refused to refinance
the loans later on the same terms it extended to white
borrowers, resulting in defaults.

Loans in predominantly minority neighborhoods were 4.8 times
more likely to end in foreclosure than loans in predominantly
white neighborhoods, the lawsuit said.

A typical foreclosure costs local governments more than
$19,000 for safety inspections, police and fire calls and
maintenance, the lawsuit said. Banks should repay such costs
when they are caused by discriminatory lending, it said.

Bank of America, Wells Fargo and JPMorgan
were hit with similar lawsuits by the city. Wells Fargo
lost its bid to have its lawsuit dismissed last month.

"We are pleased with Judge Wright's rulings and look forward
to litigating our cases against Wells Fargo and Citigroup," said
Los Angeles City Attorney Mike Feuer.

The Citigroup case is: City of Los Angeles v Citigroup et al,
U.S. District Court, Central District of California, No
13-cv-9009.
(Reporting by Dena Aubin; Editing by Kevin Drawbaugh and David
Gregorio)